Search found 24076 matches

by willthrill81
Wed Apr 21, 2021 11:50 pm
Forum: Personal Finance (Not Investing)
Topic: Are Roth Accounts Overrated?
Replies: 55
Views: 4512

Re: Are Roth Accounts Overrated?

OP, there is a portion of your argument that holds water if your tax bracket will be the same or lower in retirement. Correct. And from what I've seen, those currently in the 12% bracket who are also likely to remain there in retirement aren't likely to see much benefit from using Roth over taxable...
by willthrill81
Wed Apr 21, 2021 11:48 pm
Forum: Personal Finance (Not Investing)
Topic: Are Roth Accounts Overrated?
Replies: 55
Views: 4512

Re: Are Roth Accounts Overrated?

If that is the case perhaps the tax drag you speak of is very minor? The tax drag on stock index funds can be quite low. You can observe this for Vanguard's funds by clicking on the 'performance' tab when observing a given fund on their website. For VTI , their TSM ETF, the tax drag at the highest ...
by willthrill81
Wed Apr 21, 2021 9:11 pm
Forum: Personal Finance (Not Investing)
Topic: Car warranty companies
Replies: 23
Views: 1351

Re: Car warranty companies

I am usually a big advocate of avoiding car warranties. However, my current use case is causing me to rethink. When my car was 1 years old and had only 8,000 miles, an independent mechanic found a substantial oil leak while doing an oil change. The dealer took over a week to fix the problem. Few we...
by willthrill81
Wed Apr 21, 2021 9:04 pm
Forum: Investing - Theory, News & General
Topic: Ideal Bond allocation by age
Replies: 45
Views: 3773

Re: Ideal Bond allocation by age

I believe that an investor's risk tolerance is of far more importance than what anyone else thinks their AA should be. That said, if an investor's risk tolerance allows for it, I believe that a compelling historical and mathematical argument can be made for 100% stocks until about 10 years from reti...
by willthrill81
Wed Apr 21, 2021 8:58 pm
Forum: Personal Finance (Not Investing)
Topic: Are Roth Accounts Overrated?
Replies: 55
Views: 4512

Re: Are Roth Accounts Overrated?

If that is the case perhaps the tax drag you speak of is very minor? The tax drag on stock index funds can be quite low. You can observe this for Vanguard's funds by clicking on the 'performance' tab when observing a given fund on their website. For VTI , their TSM ETF, the tax drag at the highest ...
by willthrill81
Wed Apr 21, 2021 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: What Were Your Regrets after Retiring? (serious question)
Replies: 31
Views: 3885

Re: What Were Your Regrets after Retiring? (serious question)

It seems that the overwhelming majority of retirees have no regrets. My father has been retired for two years now and says that he's very thankful that he retired when he did (being that he was a hospital pharmacist). There is probably some self-selection at work here. Those who enjoy their work so ...
by willthrill81
Wed Apr 21, 2021 8:26 pm
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

Given that the OP said that s/he is "pursuing financial independence," I don't know why such advice would be offered. Because different people have different ideas about what "financial independence" means. If you've been living with your parents since infancy, perhaps independe...
by willthrill81
Wed Apr 21, 2021 7:36 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

I agree that treating a mortgage as a negative bond is not a 'Personal Finance 101' topic, but this is BHs. We're not always dealing with people who don't know the value of cash, don't know their annual expenses, assume that stocks and their house's market value only go up, etc. willthrill81, I dis...
by willthrill81
Wed Apr 21, 2021 7:06 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

I agree that treating a mortgage as a negative bond is not a 'Personal Finance 101' topic, but this is BHs. We're not always dealing with people who don't know the value of cash, don't know their annual expenses, assume that stocks and their house's market value only go up, etc. willthrill81, I dis...
by willthrill81
Wed Apr 21, 2021 6:51 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

What hyperbole. There's nothing 'dangerous' about it at all to those who aren't blind to how much liquid assets they have. willthrill81, So, if "negative bond" is not liquid, how could you call it as a bond? <<who aren't blind to how much liquid assets they have.>> Really? A) Most people ...
by willthrill81
Wed Apr 21, 2021 6:34 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

Kenkat, If you do, how do you rebalance the mortgage? In summary, mortgage as a "negative bond" is a useless and dangerous idea. 1) It is useless because you cannot rebalance it in your AA. 2) It is dangerous because it understate the difference in liquidity in real bond fund versus so ca...
by willthrill81
Wed Apr 21, 2021 6:23 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

Would you put the mortgage in your asset allocation, Kenkat, If you do, how do you rebalance the mortgage? In summary, mortgage as a "negative bond" is a useless and dangerous idea. 1) It is useless because you cannot rebalance it in your AA. 2) It is dangerous because it understate the d...
by willthrill81
Wed Apr 21, 2021 6:10 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

Would you put the mortgage in your asset allocation, Kenkat, If you do, how do you rebalance the mortgage? In summary, mortgage as a "negative bond" is a useless and dangerous idea. 1) It is useless because you cannot rebalance it in your AA. 2) It is dangerous because it understate the d...
by willthrill81
Wed Apr 21, 2021 6:09 pm
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

I'm guessing you don't mean that you're seeking to have millions before you think about marriage and kids, but that you want to be out of debt and on solid financial footing. If you want to be FI first, you need to make a lot more money. I like the 50/30/20 rule. Calibrate your life so no more than...
by willthrill81
Wed Apr 21, 2021 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

I'm guessing you don't mean that you're seeking to have millions before you think about marriage and kids, but that you want to be out of debt and on solid financial footing. If you want to be FI first, you need to make a lot more money. I like the 50/30/20 rule. Calibrate your life so no more than...
by willthrill81
Wed Apr 21, 2021 4:22 pm
Forum: Personal Investments
Topic: withdrawal strategy after market decline
Replies: 43
Views: 3051

Re: withdrawal strategy after market decline

Easy.. let's suppose you retire with $1.2M in equities and $.8M in FI (bonds, etc.).... 60/40 on a $2M portfolio. Your planned withdrawal rate is 4% because you read about it on Bogleheads and heard it repeated here endlessly. That's $80K annually as a start inflationary indexed. Let's say you need...
by willthrill81
Wed Apr 21, 2021 4:01 pm
Forum: Personal Consumer Issues
Topic: 12 year boat loan!
Replies: 22
Views: 1852

Re: 12 year boat loan!

I've seen many ads for 20 year RV loans. That's even worse. I can't imagine being underwater for 20 years on a toy.
by willthrill81
Wed Apr 21, 2021 3:45 pm
Forum: Personal Investments
Topic: withdrawal strategy after market decline
Replies: 43
Views: 3051

Re: withdrawal strategy after market decline

So adjustments have not been strictly necessary with such a low starting withdrawal rate. So seems like your argument is person could make a reduction if it made them feel better but would not really be necessary. I can look into amortization-based withdrawal method. There are lots of threads debat...
by willthrill81
Wed Apr 21, 2021 2:04 pm
Forum: Investing - Theory, News & General
Topic: The end of LendingClub
Replies: 50
Views: 8319

Re: The end of LendingClub

LC is yet another lesson not to stretch for yield. Higher yield is a very effective bait that conceals the hook well. The traditional bond market is extremely efficient at pricing risk, more so than the stock market. When yields of essentially all safe quality bonds throughout the developed world n...
by willthrill81
Wed Apr 21, 2021 12:29 pm
Forum: Personal Finance (Not Investing)
Topic: Unicorns pay no federal tax!
Replies: 38
Views: 3876

Re: Unicorns pay no federal tax!

TheHiker wrote: Wed Apr 21, 2021 12:18 pm For MFJ capital gains are not taxed up to 80K. Then the next 24K are the standard deduction.
So if you live off your investments, you can have 104K non-taxable income.
And that's in addition to the cost-basis of your proceeds, which are not subject to taxation.
by willthrill81
Wed Apr 21, 2021 12:20 pm
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

Outside of most HCOL areas, renting is more expensive than owning an equivalent property. As such, there is no difference to invest. Not being in the market I can't debate that point, but there are ownership costs other than mortgage payments and transaction costs are high. Property taxes, maintena...
by willthrill81
Wed Apr 21, 2021 12:09 pm
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

Lastly, some dreams of mine are to buy a home in the near future (maybe when this crazy housing market crashes?!) and overall save for a future family with little to no debt for as long as I can manage. I would wait on the house. If your experience is anything like mine, the starter house you think...
by willthrill81
Wed Apr 21, 2021 12:01 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

I'm not clear on how a home as an asset should be factored into asset allocation. It is a large asset. The home values in our neighborhood keep rising as well. Should this asset be considered in asset allocation? Whether there is a mortgage on your home or not, it's providing value to you in the fo...
by willthrill81
Wed Apr 21, 2021 10:47 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

investingdad wrote: Wed Apr 21, 2021 10:45 am Not having regrets over a thing does not automatically make the thing the most optimal choice.
True, but it depends on what's being optimized. Minimizing regret is a common goal of investors.
by willthrill81
Wed Apr 21, 2021 10:47 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

Also, our credit score is 825 having carried no debts for a very long time. We only have 2 credit cards and always pay them off. Might just be an anecdote but if folks are concerned about not having a good credit score as a result of having no debt - I don't think that's always the case. Our mortga...
by willthrill81
Wed Apr 21, 2021 10:41 am
Forum: Personal Finance (Not Investing)
Topic: Unicorns pay no federal tax!
Replies: 38
Views: 3876

Re: Unicorns pay no federal tax!

There are many existing threads about how to pay zero or very little in taxes in retirement. This is one of them. Here's a very simple example for those MFJ: You 'fill' the standard deduction via withdrawals from tax-deferred accounts ($25,100), pay zero tax on $80k of long-term capital gains (in ad...
by willthrill81
Wed Apr 21, 2021 10:16 am
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

Thank you, my only way to act on this information would be to take more equity risk in tax deferred accounts since we don't have any taxable accounts to pay off the mortgage. It does not feel right to take on more equity risk in tax deferred accounts because of the mortgage. You may not realize it,...
by willthrill81
Wed Apr 21, 2021 9:56 am
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

So, it seems like the takeaways from this thread are that if you have sufficient funds to pay off the mortgage in a taxable account, and those funds are in lower earning fixed income instrument, consider using the funds to pay off the mortgage. If you have fixed income funds in a tax deferred accou...
by willthrill81
Wed Apr 21, 2021 9:37 am
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortgage is a negative bond" - please help me understand

So, it seems like the takeaways from this thread are that if you have sufficient funds to pay off the mortgage in a taxable account, and those funds are in lower earning fixed income instrument, consider using the funds to pay off the mortgage. If you have fixed income funds in a tax deferred accou...
by willthrill81
Wed Apr 21, 2021 9:30 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

Also, our credit score is 825 having carried no debts for a very long time. We only have 2 credit cards and always pay them off. Might just be an anecdote but if folks are concerned about not having a good credit score as a result of having no debt - I don't think that's always the case. Our mortga...
by willthrill81
Wed Apr 21, 2021 9:28 am
Forum: Personal Investments
Topic: Taxes and RMDs
Replies: 8
Views: 1377

Re: Taxes and RMDs

The issue: At this point I am building a legacy fund for my heirs. I am presently just in the 32% tax bracket. Based upon an 8.1% return in my IRA investments (I have both an individual IRA and an inherited IRA) I project I will be in the 32% bracket through 2027; in 2028 it will increase to 35% th...
by willthrill81
Wed Apr 21, 2021 9:09 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

Also, our credit score is 825 having carried no debts for a very long time. We only have 2 credit cards and always pay them off. Might just be an anecdote but if folks are concerned about not having a good credit score as a result of having no debt - I don't think that's always the case. Our mortga...
by willthrill81
Wed Apr 21, 2021 9:04 am
Forum: Personal Consumer Issues
Topic: Thought about buying a small motor home, but the market is crazy; Just bought one!!
Replies: 246
Views: 22977

Re: Thought about buying a small motor home, but the market is crazy; Just bought one!!

One big improvement that can be made is to add Sumo Springs to aid in the handling characteristics which can pretty easily be done DIY in your driveway as long as you’re reasonably handy and don’t mind getting your hands dirty. Hopefully Will sees this comment and considers this mod since it’s well...
by willthrill81
Wed Apr 21, 2021 8:39 am
Forum: Investing - Theory, News & General
Topic: The end of LendingClub
Replies: 50
Views: 8319

Re: The end of LendingClub

I had let my account finish up the remaining loans and was informed in 2019 that my account had finally been closed. To my surprise they sent out their tax form for year 2020 this past January. Apparently they hadn't accounted for the residual $1.35 I've tried emailing and phoning to see if I can c...
by willthrill81
Tue Apr 20, 2021 9:40 pm
Forum: Personal Consumer Issues
Topic: Who's been to Disney World during Pandemic?
Replies: 10
Views: 1479

Re: Who's been to Disney World during Pandemic?

Masked up in the Florida humidity? No thanks. We love DW but refuse to go between the months of May and September expressly for that purpose, even without masks.
by willthrill81
Tue Apr 20, 2021 9:38 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortage is a negative bond" - please help me understand

I don't know if that's less confusing, but it's certainly less accurate. Your home isn't a bond. It's a real asset (i.e. "real estate") that does not produce a fixed amount of income. So it's not a bond. Again, I say rent out your home, live in your car and then tell me your home produces...
by willthrill81
Tue Apr 20, 2021 9:28 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 279
Views: 14182

Re: "Mortage is a negative bond" - please help me understand

Thus I would instead prefer to use the phrase “your net home value is a bond.” I don't know if that's less confusing, but it's certainly less accurate. Your home isn't a bond. It's a real asset (i.e. "real estate") that does not produce a fixed amount of income. So it's not a bond. Again,...
by willthrill81
Tue Apr 20, 2021 9:25 pm
Forum: Personal Investments
Topic: withdrawal strategy after market decline
Replies: 43
Views: 3051

Re: withdrawal strategy after market decline

A 3% fixed real dollar withdrawal strategy has been approximately equal to the perpetual withdrawal rate, meaning that even in the worst historic periods, such withdrawals would at least preserve the inflation-adjusted starting balance over the long-term (>20 years). So adjustments have not been str...
by willthrill81
Tue Apr 20, 2021 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

Can't live in an S&P 500 fund. And since no one can predict the market, there's nothing that says the S&P can't go bear for a lengthy time. On the other hand, I can live in this paid off home for the rest of my life and not care about its value whatsoever. Housing is a basic need, and when ...
by willthrill81
Tue Apr 20, 2021 5:52 pm
Forum: Investing - Theory, News & General
Topic: 457 plan distribution
Replies: 16
Views: 1113

Re: 457 plan distribution

Yes charitable giving would be one route. I do itemize annually still. I do give generously each year but I am still in the accumulation phase and find it hard to separate from 400k but will do the math for this year and see where a cutoff might be. You might find it worthwhile to only contribute e...
by willthrill81
Tue Apr 20, 2021 10:03 am
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

I am a single 24 year old finance professional pursuing financial independence. If that's your primary goal, - don't spend any money dating or on social activities - don't have children - take all the help from your parents that they will give you - don't buy a house - get rid of your debt as quick...
by willthrill81
Tue Apr 20, 2021 9:49 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

Many focus on reducing spending to build larger portfolios, but many with large portfolios later in life would rather have smaller balances and more memories made earlier in their lives. It can be a difficult balancing act. I am 62. If you can set your priorities first, then arrange your finances t...
by willthrill81
Tue Apr 20, 2021 9:42 am
Forum: Personal Finance (Not Investing)
Topic: Young Twenties Seeking Financial Independence
Replies: 40
Views: 3007

Re: Young Twenties Seeking Financial Independence

Being that you're single, you're well into the 22% bracket, so I would recommend maxing out your 401(k) at work first unless the expense ratios of the funds you have access to there are ridiculously high; at your age, a strong argument can be made that all of your investments should be in stocks, as...
by willthrill81
Tue Apr 20, 2021 9:37 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

This is why I largely lean towards slight mortgage payoff. In a couple years my deferred comp account will be $150,000. Our Roths will be $100,000. Our brokerages will be $200,000. As I've posted in more detail before, I call these "flex assets" that will get me through any liquidity cris...
by willthrill81
Tue Apr 20, 2021 9:33 am
Forum: Personal Finance (Not Investing)
Topic: Car warranty companies
Replies: 23
Views: 1351

Re: Car warranty companies

Rather than buy an extended warranty, put the amount that you would have spent on one into a savings account designated for that purpose. We've done this for years for many irregular and non-monthly expenses, as discussed in this thread, and it's worked perfectly.
by willthrill81
Tue Apr 20, 2021 9:29 am
Forum: Personal Investments
Topic: Cash out Refi to invest?
Replies: 2
Views: 216

Re: Cash out Refi to invest?

There's no doubt that you would be increasing risk by doing a cash-out refi to put it into VTSAX. You would be shooting yourself in the foot to put any of the funds into VBTLX because your mortgage rate will be costing you significantly more than the yield on VBTLX. Also, cash-out refinances usually...
by willthrill81
Tue Apr 20, 2021 9:20 am
Forum: Investing - Theory, News & General
Topic: 457 plan distribution
Replies: 16
Views: 1113

Re: 457 plan distribution

One bump for any more thoughts? wm If you're charitably inclined, you could reduce your taxable income by withdrawing the bulk of these funds in a single year (unless you're itemizing every year anyway, but few are anymore) and either making a direct donation(s) to a charity or to a donor-advised f...
by willthrill81
Tue Apr 20, 2021 9:15 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

If you're saving/investing $80K+ a year, are you going to miss that $6000 in case of an emergency? Can you earn more than 2.88% guaranteed on any fixed income investment over your timeframe? This is why I largely lean towards slight mortgage payoff. In a couple years my deferred comp account will b...
by willthrill81
Tue Apr 20, 2021 9:12 am
Forum: Personal Finance (Not Investing)
Topic: "Nobody's ever regretted paying off the mortgage."
Replies: 486
Views: 31597

Re: "Nobody's ever regretted paying off the mortgage."

Paying off the mortgage is an emotional decision. Sometimes, but not always. Paying down/off one's mortgage often provides a higher return than what fixed income can provide. When someone says that their AA is X/Y, it's pretty uncommon for someone to say criticize it on the basis of the person havi...
by willthrill81
Mon Apr 19, 2021 9:37 pm
Forum: Investing - Theory, News & General
Topic: Is passive investing leading to bigger market inefficiencies?
Replies: 62
Views: 4591

Re: Is passive investing leading to bigger market inefficiencies?

If passive investing is leading to inefficiencies, then active investors should be able to take advantage of them. But TMK, active investors' returns are still lagging those of passive investors.